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LegalZoom stock slides 30% after Q2 guidance cut
The company said changes to Google's search algorithm disrupted traffic tied to its business model even as subscription revenue rose 11% in the quarter.
LegalZoom (NASDAQ: LZ) is facing a sharp pullback after reporting second-quarter results that led to a guidance cut, sending its stock down 30% following the earnings release, according to Yahoo Finance.
The news arrives shortly after LegalZoom announced an agent integrated into Microsoft 365 Copilot on August 4, intended to help small business owners handle tasks including business formation, compliance filings, and attorney consultations within the Microsoft productivity tool.
LegalZoom reported total revenue of $205.3 million, up 7% year over year, roughly in line with analysts' expectations, while subscription revenue rose 11% and marked five consecutive quarters of double-digit growth in that higher-margin category.
Management attributed the broader market reaction to weaker performance in other areas, saying abrupt changes to Google's search algorithm hurt the company’s traffic from the world’s largest search engine, a key input for its customer acquisition.
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